Defence spend as percentage of GDP has fallen world over

Government allocated Rs 2.74 lakh crore for defence in the 2018 budget. This will amount to 1.56% of the country’s GDP, making this allocation the lowest ever in terms of share of GDP.

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Updated: Jul 11, 2018, 01.32 PM IST

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US by far spends the highest on its defence. America’s total defence expenditure is roughly equal to the defence expenditure of the next nine highest- spending countries.

India’s defence forces have expressed unhappiness over the allocation for them in the Union Budget which, at 1.56% of the GDP, was the lowest since 1962, when India and China fought a war. But the defence budget as a part of the GDP has actually been shrinking across the world...

Is India the only country whose defence bill as percentage of GDP has reduced?

• Government allocated Rs 2.74 lakh crore for defence in the 2018 budget. This will amount to 1.56% of the country’s GDP, making this allocation the lowest ever in terms of share of GDP. The analysis of budget allocations as a percentage of GDP for other major economies shows a similar pattern. As an economy grows, the proportion of its defence expenditure as compared to its overall size is bound to fall. This pattern is followed in most of the countries.

Are these countries making their own armaments?

• No. Many of these countries that top defence expenditure are dependent on import of defence equipment. In 2017, India was the world’s second-largest ar ms importer.
Which are the world’s largest arms suppliers?

• US followed by Russia are the world’s largest arms suppliers. Together they dominate the global arms market by a huge margin as compared to other countries.

In absolute terms, which country spends the highest on defence?

• US by far spends the highest on its defence. America’s total defence expenditure is roughly equal to the defence expenditure of the next nine highest- spending countries.